Project7 rivals gum’s big boys with philanthropy and crazy flavors

08-Jul-2015 - Last updated on 09-Jul-2015 at 12:51 GMT

Startup Project7 bursts onto U.S. gum market, unperturbed by corporate red tape on innovation

US social enterprise Project7 is carving a niche for itself in the highly consolidated chewing gum market with novel flavors such as birthday cake and sour caramel apple.

The company, which donates a portion of profits to social causes for each of its flavors, bagged an award for the most innovative new gum at May’s Sweets & Snacks Expo in Chicago for its grapefruit melon flavor gum.

‘Most people thought we were crazy’

Project7, founded in 2008, operates in a global gum market dominated by two companies – Wrigley and Trident owner Mondelēz International – that together makeup 60% of gum sales.

"Most people thought we were crazy - it's not a hot category to jump into,” Project7 founder Tyler Merrick told ConfectioneryNews.

The North American gum market has declined 4.7% in retail value sales every year since 2009, according to Euromonitor International, but the decline is expected to slow to a negative compound annual growth rate (CAGR) of 2.1% up to 2019.

Unhindered path to innovation

Merrick said gum’s troubles had been propagated by barriers to innovation that had taken the fun out of gum.

Project7 retail distrbution — Project7 has secured distribution at retailers such as Meijer and Target.

"For the big guys, their path to innovation is a challenge sometimes....we can take those risks because we're smaller and I think that's been what the category's been lacking."

He continued: “We don’t have to go through committee if we want to try a flavor. If we want to take a risk and put birthday cake out, we can trip over ourselves but we can at least just get it out there."

Project7 has introduced flavors that have rarely been tried in gum before such as wedding cake, mint julep and kettle pop (popcorn).

Social projects

Each of Project7’s flavors is partnered with a non-profit organization. The company donates part of the profits from brand sales to the social causes, which include anti-bullying, conservation and homelessness relief.

Bold flavors

Merrick said flavors like birthday cake had been for the taking in gum for the past five years, but it took Project7 to take the leap.

Birthday cake flavor has become the company’s top seller since it was launched 18 months ago."When we came out with that flavor the retailers were like: 'I don’t know man! This is not what people chew gum for - we'll probably sell a lot in the first couple of weeks and then it will crash' and it's been just the opposite,” said the social entrepreneur.

Merrick said his firm’s strategy had helped Project7 differentiate itself from the bigger players that tended to sell gum primarily as a breath freshener.

Project7 gum is produced in the U.S. and is packaged is resealable standup pouches with 12 pieces per pack.